housing tax

Australia won’t follow NZ down housing tax path

PHOTO: The surge in house prices in the past few months has made the issue more pressing for Jacinda Ardern’s government.  AP

New Zealand’s tough new measures to crack down on an exuberant housing market roiled financial markets on both sides of the Tasman this week, but experts doubt Australia will follow suit by removing tax breaks linked to property investment.

“I don’t think that you should join the dots,” said Justin Tyler, fixed-income manager at Daintree Capital. “I don’t think that any of those New Zealand tax changes are immediately relevant in the current Australian political environment.”

New Zealand announced this week that it would set up a multibillion-dollar fund to boost the supply and availability of affordable housing, and would clamp down on tax breaks for property investors.

The political will to act on housing is high in New Zealand after Prime Minister Jacinda Ardern’s key strategies to make housing more affordable failed in her first term, said Tony Morriss, head of Australian and New Zealand fixed income strategy at Bank of America.

The surge in house prices in the past few months has made the issue more pressing for the Ardern government: house prices jumped 5.2 per cent in February, Real Estate Institute of New Zealand data showed, taking the annual increase to 21.5 per cent.

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